In a surprising statistic, 4 out of every 10 wooden kitchen items in American households now come from Vietnam. This remarkable footprint is pushing Vietnamese businesses to adapt, especially in response to new U.S. tariff policies.

During a business policy forum on August 16, economist Dr. Can Van Luc, a member of the Prime Minister's Economic Advisory Council, shared key trade data that caught the attention of many local enterprises. As he displayed a chart outlining Vietnam’s primary goods trading partners over the first seven months of 2025, many business leaders immediately took out their phones to capture the figures.

The data revealed a sobering trend: the proportion of domestic Vietnamese firms in key export sectors to the U.S. remains low. For instance, domestic enterprises only accounted for 16.71% of footwear exports, 9.84% of toys and sports equipment, 9.63% of electronics and components, and 6.15% of machinery and equipment.

Dr. Luc emphasized that Vietnam’s economic growth model has long relied on exports. However, the recent introduction of “transshipment tariffs” by the U.S. should serve as a wake-up call, offering an opportunity for Vietnamese enterprises to restructure and increase domestic value content in their exports. He stressed the need for local manufacturers, especially those in supporting industries, to grow stronger.

Nguyen Ngoc Hoa, Chairman of the Ho Chi Minh City Union of Business Associations (HUBA), added that boosting domestic content in production will serve two strategic goals. First, it will help mitigate the risk of additional U.S. transshipment tariffs in the future. Second, it will generate real value and employment for Vietnam's economy.

What defines a transshipped product?

This question continues to puzzle many. Dr. Luc advised businesses to stay calm. He noted that the 40% transshipment tariff being discussed applies globally, not just to Vietnam. Even U.S. authorities are currently struggling to define specific evaluation criteria.

According to the World Trade Organization (WTO), a product is considered domestically produced if local content accounts for 30–37%. However, Dr. Luc pointed out that Washington has yet to release formal guidelines. Therefore, he suggested that Vietnam should refrain from issuing its own criteria and instead wait for the U.S. to do so, then enter negotiations.

“In the meantime, we recommend that Vietnamese companies aim for at least 50% domestic production content to stay on the safe side,” Dr. Luc advised.

Regarding the new 20% countervailing duty imposed by the U.S. on Vietnamese goods, Phung Quoc Man, Chairman of the Handicraft and Wood Industry Association of Ho Chi Minh City, said many companies are considering relocating production to third countries or even the U.S. itself to avoid heavy tariffs.

Wood product manufacturers earning between USD 50 million and USD 300 million annually are now exploring “Made in USA” labeling by setting up Vietnamese-run production facilities on American soil.

Dr. Luc highlighted that Vietnamese wooden products are highly favored by American consumers for their fine craftsmanship and wood quality, which differs notably from those produced in China and elsewhere. As a result, Vietnam has captured an impressive share of the American kitchenware market.

Some Vietnamese businesses have even moved production to Colombia, enabling them to export to the U.S. with lower tariffs.

Tran Chung